Kyrgyzstan's Launch of National Stablecoin and CBDC
Background
Kyrgyzstan, a mountainous former Soviet republic with approximately 7 million inhabitants, is known for its reliance on labor migrants in Russia. However, in recent years, it has emerged as a leader in cryptocurrency within Central Asia.
National Stablecoin and CBDC Initiative
- A5A7 Stablecoin
- Backed by the Russian rouble and based in Kyrgyzstan.
- Placed under sanctions by Western governments due to its role in facilitating the avoidance of sanctions on Russia amid the Ukraine war.
- Partnership with Binance
- Launched a national stablecoin and a central bank digital currency (CBDC) in collaboration with Binance.
- Changpeng Zhao, Binance founder, appointed as an adviser on digital assets to Kyrgyzstan's President Sadyr Japarov in May.
- Technical Implementation
- The Kyrgyz national stablecoin is launched on the BNB Chain.
- The digital version of Kyrgyzstan’s currency, the som, is ready for government payments.
- Cryptocurrency Reserve
- A national cryptocurrency reserve has been established, including Binance’s BNB token.
Political Context
Since coming to power through street protests in 2020, President Sadyr Japarov has tightened control over dissent. Kyrgyzstan is scheduled to hold a snap parliamentary election on November 30, with Japarov's allies seeking to strengthen their legislative influence.